McCall had been hoping to secure a move for the free agent after being given the go ahead to make at least one signing.
But McFadden, who has been training with his former club all summer, held subsequent talks with chief executive Leeann Dempster and the pair failed to agree a move.
"I spoke to James on Friday and we had a good football chat, it was open,” McCall said.
"Since then James has spoken to people who are a lot higher than I am at Motherwell who deal with the purse strings and I don't think the outcome was favourable.
"He was back in training (on Wednesday) but I don't think the money side of it quite added up."
McCall added: "In fairness to the board, they were willing to stump up an amount for James but obviously it's not good enough.
"I'm not painting this any way that James has ben asking for great deals of money. I'm not saying that whatsoever.
"I wasn't involved in the talks, I just speak about the football and leave the other side.
"We have got to remember where James has come from and what offers he has probably got on the table as well."
McFadden was released by Everton in the summer after failing to hold down a first-team place following his return from a serious knee injury.